Wheat futures posted a strong rally across all major exchanges on Monday, driven by concerns over tightening global supplies and dry conditions in key growing regions. The May 25 CBOT Wheat contract closed at $5.68 ½ per bushel, up 11 ½ cents. Kansas City Hard Red Winter (HRW) wheat saw even stronger gains, with nearby contracts rising 19 to 20 cents, while Minneapolis Spring Wheat (HRS) ended the session 13 to 14 cents higher. The market was supported by bullish export data, as the USDA reported wheat export inspections at 482,658 metric tons (MT) for the week ending March 13—more than double the previous week’s volume and 24.89% higher than the same period last year. South Korea, Japan, and Mexico were the largest buyers. While wheat prices found support from export sales and dry weather in the U.S. Southern Plains, some pressure remains from strong Russian wheat exports.

Corn futures also advanced on Monday, with the May 25 CBOT Corn contract closing at $4.61 per bushel, up 2 ½ cents. The market gained momentum from strong export demand, as the USDA’s latest data showed 1.659 million MT of corn shipments last week, a 25.06% increase from the same week in 2024. Mexico, Japan, and Colombia were the primary destinations. However, compared to the prior week, total export shipments declined 10.06%, signaling some near-term demand concerns. In South America, Brazil’s second corn crop is now 97% planted, with analysts watching dry conditions in Goiás, Mato Grosso do Sul, and Paraná that could impact yield development.

Soybean futures showed mixed action on Monday, with front-month contracts trading fractionally lower while new crop contracts posted gains of up to 2 cents. The May 25 CBOT Soybean contract settled at $10.15 ½ per bushel, down ½ cent. Soybean meal futures declined 80 cents to $1.60/ton, while soybean oil futures rose between 37 and 51 points. USDA’s weekly export inspections report showed 646,667 MT of soybeans shipped last week, marking a 7.7% decline from the previous week and 24.2% below the same period last year. China was the top buyer, securing 420,243 MT, ahead of upcoming tariff deadlines. The National Oilseed Processors Association (NOPA) reported that the U.S. soybean crush rate slowed significantly in February, coming in at 177.87 million bushels, well below the market’s expectation of 185.229 million bushels and marking an 11.13% decline from January. Brazilian soybean harvest progress reached 70%, well ahead of last year’s 63% pace.

Key Global Market Developments Impacting Grain Prices

Trade tensions escalated sharply as President Donald Trump reaffirmed his commitment to imposing broad reciprocal and sector-specific tariffs starting April 2. Agricultural goods, along with steel, aluminum, and automobiles, are likely to be impacted. China responded by halting soybean imports from three major U.S. agricultural entities, further shifting its reliance toward Brazilian soybeans. This shift has sent Brazilian soybean export premiums soaring by 70% as Chinese crushers scramble for supplies.

The European Union announced its intent to impose tariffs on $28.2 billion worth of U.S. goods, including soybeans, corn, and beef, in retaliation for U.S. trade restrictions on European steel and aluminum. European feed industry officials warned that higher input costs could disrupt supply chains for livestock feed, leading to increased demand for rapeseed meal and sunflower seed meal as alternative protein sources.

China’s corn imports from Brazil surged 84% year-over-year, solidifying its shift away from U.S. supplies. Analysts are concerned that this trend could have long-term consequences for U.S. corn exporters, particularly if the Biden administration introduces new trade restrictions on Chinese technology.

The wheat market is closely watching dry conditions in southwestern Russia, where soil moisture levels remain critically low. While some precipitation occurred over the weekend, analysts doubt it will be enough to offset prolonged drought conditions. Meanwhile, Ukraine continues to struggle with Russian attacks on agricultural infrastructure, which threaten to disrupt Black Sea grain exports.

In the United States, winter wheat conditions remain mixed. The Southern Plains saw strong winds and wildfires last week, exacerbating dryness, while the Midwest was hit by severe storms and blizzard conditions. The Northern Plains is expected to receive additional snow this week, but analysts say more moisture is needed to alleviate long-term drought concerns.

South America’s weather outlook remains mixed. Rainfall in Argentina is expected to support corn and soybean crops, while dry conditions in Paraguay could negatively impact late-season soybean yields. Meanwhile, Central-West Brazil is anticipating timely rains, which should aid the second corn crop’s development.

The NOPA soybean crush report for February revealed a larger-than-expected slowdown in crushing activity, reflecting weaker soymeal demand and cold-weather disruptions. Analysts projected soybean crush at 185.229 million bushels, but the actual figure came in at 177.87 million bushels, a 7.6% decline from January. Meanwhile, soybean oil stocks rose 8.8% month-over-month to 1.386 billion pounds.

Brazil’s soybean harvest is ahead of schedule, with 70% of the crop harvested, compared to 63% at this point last year. The national soybean production estimate now stands at 167.37 million metric tons, according to Conab, while USDA holds its estimate at 169 million tons. However, Brazilian soybean exports have fallen 30.4% year-over-year, mainly due to logistical constraints.

Brazil’s corn stocks remain historically low, with beginning inventories for the 2024/25 season at just 2.04 million metric tons, compared to 7.2 million tons in 2023/24. This tight supply situation has pushed domestic corn prices close to BRL 90 per 60-kilo bag, levels last seen in April 2022. Analysts expect continued high domestic demand to support prices.

Indonesia’s palm oil exports surged 62.2% in February, reaching a four-month high after Jakarta cut export taxes to outcompete Malaysian supplies. This shift caused Malaysian palm oil exports to fall to a four-year low, while Indonesian palm oil shipments increased 45.1% year-over-year. Analysts say higher palm oil exports will likely keep global edible oil prices elevated.

Uncertainty over new U.S. tariffs has strengthened potash prices. Prices at New Orleans (NOLA) increased to $310-$315 per short ton, while Corn Belt prices jumped to $345-$360. The fertilizer market remains volatile as farmers gear up for spring planting.

Market Outlook for the Coming Trading Session

As trade tensions escalate and weather remains uncertain, volatility is expected to persist across global grain markets. Traders will closely monitor the U.S.-China trade negotiations, EU tariff developments, and crop progress in South America. Key reports this week include the USDA export sales report and the next WASDE report, which will provide updated insights on global supply and demand trends. Given the geopolitical risks and shifting trade flows, traders should anticipate continued price swings across wheat, corn, and soybean markets in the days ahead.